The resilience of Colorado’s vaunted “new energy economy” is being tested after a series of job cuts, financial setbacks and political firestorms.

The latest loss was Phillips 66’s announcement last week that it is pulling the plug on a major alternative-fuels research-and-development center that was planned on the former StorageTek site in Louisville.

The Weld County district attorney’s office is investigating the failure of Colorado solar-panel manufacturer Abound Solar, and congressional Republicans are asking tough questions about Abound’s federal loan guarantees.

At the least, the setbacks are a speed bump in Colorado’s effort to maintain a leadership status in renewable energy. At worst, they could significantly impair growth of the industry.

The combined layoffs, plant closure and mothballed projects in Colorado represent the loss of more than 1,000 existing and projected jobs, plus millions of dollars of tax revenue and spinoff economic activity.

Hard times for the green industries stem from a combination of technical challenges, low-cost foreign competition and an uncertain outlook for government support of alternative energy.

“It’s not just Colorado,” said William Yeatman, an energy analyst with the Competitive Enterprise Institute, a Washington, D.C.-based free-market think tank.

“Renewable-energy manufacturing is taking a beating across the country, primarily due to the fact that federal subsidies have run their course,” he said. “The 2009 stimulus has been spent, and the wind production-tax credit is set to expire in December. Without taxpayer handouts, these green industries simply cannot compete.”

Volatility expected

Advocates for renewable energy say tax credits and loan guarantees are necessary tools for the wind and solar industries to survive and grow until they reach scales to compete with other power sources.

Former Colorado Gov. Bill Ritter, who coined the term “new energy economy” during his 2006 gubernatorial campaign, said he remains convinced that Colorado will be a center for renewable-energy commerce and research despite the recent spate of layoffs and bankruptcies.

“People still see Colorado as a state that moved forward with an aggressive agenda,” said Ritter, a Democrat who now serves as director of the Center for the New Energy Economy at Colorado State University.

“There is going to be some volatility within this industry,” he said. “But what I would argue is that we will not go backwards. The public demand for clean energy is very strong. And our R&D corridor is as strong as any place in the nation.”

“If the PTC comes back for three years, Vestas would be at full-tilt boogie,” he said.

Failure to extend the PTC would devastate the wind-energy industry, according to a report by Navigant Consulting, commissioned by the American Wind Energy Association.

Wind-supported jobs in the U.S. would drop nearly in half, from 78,000 in 2012 to 41,000 in 2013, the report said. Installations of wind generation would decline from 12 gigawatts this year to 2 gigawatts next year. Investment in wind energy would fall from $15.6 billion in 2012 to $5.5 billion next year.

While solar energy is not affected by the production-tax credit — solar has its own investment-tax credit through 2016 — the industry is not immune from problems.

The Chapter 7 bankruptcy and subsequent closure of solar-panel manufacturer Abound Solar this year has become a hot issue in political and government circles.

While Abound officials blamed the shutdown on crippling competition from low-cost Chinese manufacturers, others — chiefly Republicans in Congress — say Abound was selling faulty equipment. They are investigating to determine if the U.S. Department of Energy was aware of Abound’s technical problems before it authorized a $400 million loan guarantee in 2010.

Abound drew about $70 million in guaranteed loans. The DOE has estimated that U.S. taxpayers will be on the hook for about $40 million to $60 million following Abound’s liquidation.

The Weld County district attorney’s office is saying little about its investigation of Abound, reported this month by 7News.

“I can confirm that there is an investigation into Abound Solar from our office,” said spokesman Heath Montgomery. “As it pertains to the nature of that investigation, I can’t comment on that.”

House investigation

U.S. Rep. Cory Gardner, a Colorado Republican whose district includes Abound’s former office and manufacturing sites, serves on the House Energy and Commerce Committee, which is investigating the Abound loans.

“Did the DOE rush to issue a loan guarantee on a product that wasn’t ready for prime time?” Gardner said. “We need to know what the DOE knew and when they knew it.”

He said the investigation seeks to address the issue of the government “picking winners and losers” through the issuance of loan guarantees to a handful of companies.

Gardner said he supports a short-term extension of the wind-production tax credit because, unlike selective solar loan guarantees, any company producing wind power can claim the tax credit.

DOE spokesman Damien LaVera declined to comment specifically on the House investigation. He noted that Abound, since its founding in 2007 under the name AVA Solar, had Republican and Democratic backing as it requested government incentives for operations in Colorado and Indiana.

“Abound had strong bipartisan support — first in the form of a grant from DOE under the Bush administration, and later in the form of letters and public statements from members of Congress from Colorado and Indiana and the governor of Indiana,” LaVera said.

Namaste Solar of Boulder, one of Colorado’s largest solar-system installers, has used Abound panels for two projects. On one of the installations, using an early version of Abound panels, the equipment malfunctioned and needed to be replaced. The second project using a later version operated normally.

Blake Jones, president of Namaste, said he was intrigued with the idea of using a Colorado-based supplier. But Abound was “late to the game” compared to more established panel manufacturers, Jones said, and had difficulty scaling up its production enough to be cost-competitive.

Jones said the failure of Abound is not representative of the solar manufacturing sector, nor should it be used as a reason to curtail financial incentives to the industry.

“Oil and gas is subsidized; nuclear is subsidized,” he said. “The playing field needs to be leveled in order to support the solar industry during its maturation phase. I do believe we’ll reach a point where unsubsidized solar can compete with other technologies.”

Using data from the Dartmouth Atlas – a source of information and analytics that organizes Medicare data by a variety of indicators linked to medical resource use – we recently ranked geographic areas based on markers of end-of-life care quality, including deaths in the hospital and number of physicians seen in the last year of life.